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DECISION No

DECISION No. 16/2003/QD-TTg OF JANUARY 22, 2003 APPROVING THE CHARTER ON ORGANIZATION AND OPERATION OF VIETNAM BANK FOR SOCIAL POLICIES

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the Government’s Decree No.78/2002/ND-CP of October 4, 2002 on credits for the poor and other social policy beneficiaries;

Pursuant to the Prime Minister’s Decision No.131/2002/QD-TTg of October 4, 2002 on setting up Vietnam Bank for Social Policies;

At the proposal of the State Bank Governor- the chairman of the Management Board of the Vietnam Bank for Social Policies- in Report No.142/NHCSXH-TT of January 16, 2003,

DECIDES:

Article 1.- To approve the Charter on organization and operation of Vietnam Bank for Social Policies, issued together with this Decision.

Article 2.- This Decision takes effect after its signing.

Article 3.- The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government, the presidents of the People’s Committees of the provinces or centrally-run cities, the Management Board chairman and the general director of Vietnam Bank for Social Policies shall have to implement this Decision.

Prime Minister
PHAN VAN KHAI

CHARTER ON ORGANIZATION AND OPERATION OF VIETNAM BANK FOR SOCIAL POLICIES

(Promulgated together with the Prime Minister’s Decision No. 16/2003/QD-TTg of January 22, 2003)

Chapter I

GENERAL PROVISIONS

Article 1.- Vietnam Bank for Social Policies is set up and operates under the Prime Minister’s Decision No.131/2002/QD-TTg of October 4, 2002. It operates for non-profit purposes, implementing preferential credit policies towards poor people and other social policy beneficiaries.

Article 2.-

1. Vietnam Bank for Social Policies is a legal person.

2. Its Vietnamese name: Ngan Hang Chinh Sach Xa Hoi.

Abbreviated to: NHCSXH.

3. Its international transaction name: Vietnam Bank for Social Policies.

Abbreviated to: VBSP.

4. Its head-office is located in Hanoi capital.

5. Its charter capital is VND 5,000,000,000,000 (five thousand billion Vietnam dong).

6. It has its own seal and accounts opened at the State Bank, the State Treasury and domestic and foreign banks.

7. It has its financial balance sheet and various funds as provided for by law.

Article 3.- The operation duration of Vietnam Bank for Social Policies is 99 years.

Chapter II

OPERATION SCOPE AND CONTENTS

Section 1. CAPITAL SOURCES

Article 4.-

1. Capital sources from the State budget:

a) Charter capital;

b) Lent capital for hunger elimination and poverty alleviation, job creation and the implementation of other social policies;

c) Capital partly deducted from the sources of increased revenues and/or saved expenditures of budget of various levels in order to increase lent capital sources in localities;

d) ODA capital allocated by the Government.

2. Mobilized capital:

a) Interest deposits of domestic and foreign organizations and individuals;

b) Deposits of State-run credit institutions being equal to 2% of the balance of mobilized capital in Vietnam dong with interests paid under agreement;

c) Voluntary interest-free deposits of domestic and foreign organizations and individuals;

d) Bonds issued under the Government’s guarantee, deposit certificates and other valuable papers;

e) Savings of poor people.

3. Capital borrowed from:

a) Financial or credit organizations at home and abroad;

b) Postal Savings, Vietnam Social Insurance;

c) The State Bank.

4. Non-refundable capital voluntarily contributed by domestic and foreign individuals, economic organizations, financial and credit organizations, socio-political organizations, associations, societies and non-governmental organizations.

5. Capital entrusted for preferential loans by local administrations, economic organizations, socio-political organizations, associations, societies, non-government organizations and individuals at home and abroad.

6. Other capital sources.

Section 2. LENDING

Article 5.- Lending scope

1. Poor households.

2. Pupils and students being in difficult plights and studying in universities, colleges, intermediate vocational and job-training schools.

3. Subjects needing to borrow capital for job settlement under Resolution No.120/HDBT of April 11, 1992 of the Council of Ministers (now the Government).

4. Social policy beneficiaries going abroad to labor for definite terms.

5. Economic organizations and production and/or business households in islands, mountainous regions II and III and under the program on socio-economic development in mountainous, deep-lying or remote communes meeting with exceptional difficulties (hereinafter called Program 135 for short).

6. Other subjects to be decided by the Prime Minister.

The lent subjects defined in this Article is referred collectively to as the borrower.

Article 6.- Borrowed capital shall be used for the followings:

1. For poor households, production and/or business households in islands, mountainous regions II and III and communes under Program 135, they shall use the borrowed capital for:

a) Procurement of supplies, equipment, plant varieties, domestic animal breeds, payments for production and/or business services;

b) Capital contribution for implementation of production and/or business cooperation projects approved by competent authorities;

c) Partial satisfaction of essential demands for dwelling houses, lighting electricity, clean water, study.

2. For economic organizations in islands, mountainous regions II and III and communes under Program 135, the borrowed capital shall be used to cover production and business costs under programs or projects already approved by competent authorities.

3. For pupils and students being in difficult plights, the borrowed capital shall be used for procurement of study means and payment of expenses in service of their study at schools.

4. The borrowers being social policy beneficiaries, who go abroad to labor for definite terms, shall use the borrowed capital to pay the training fees, service charges, deposits, air tickets.

5. The borrowers being other subjects shall comply with the Prime Minister’s decisions.

6. The capital entrusted for preferential loans shall be used under the entrustment contracts.

Article 7.- Types of loan

1. Short-term loans are those with lending terms of up to 12 months.

2. Medium-term loans are those with lending terms of between 12 months and 60 months.

3. Long-term loans are those with lending terms of over 60 months.

Article 8.- Conditions for being lent with capital

1. The borrowers being poor households must have lawful residence addresses and be on the lists of poor households decided by commune-level People’s Committees under the poverty standards announced by the Ministry of Labor, War Invalids and Social Affairs, who are assessed and put on the lists by savings and capital-borrowing teams, with certification by commune-level People’s Committees.

2. The borrowers being other social policy subjects shall comply with the current regulations of the State and the provisions of the Government’s decree on credits for the poor and other social policy beneficiaries.

Article 9.- Credit principles

1. The borrowers must use borrowed capital for the right purposes stated in the borrowing applications.

2. The borrowers must repay debts, both principals and interests, on time.

Article 10.-

1. Entrusted lending

a) Vietnam Bank for Social Policies provides loans to borrowers through entrusted organizations. The entrusted parties are those who directly disburse capital to and recover debts from borrowers and enjoy entrustment charges;

b) The entrusted parties being credit institutions shall comply with the current regulations on entrusting and undertaking the entrustment of loan capital of credit institutions;

c) The entrusted parties being socio-political organizations must satisfy the following conditions:

- Having the contingent of officials knowledgeable about lending operations;

- Having operation networks expanded to poor regions, poor households;

- Having prestige among people and gaining confidence of Vietnam Bank for Social Policies;

- Having conditions to organize the accounting, statistical work and reporting according to specific regulations of Vietnam Bank for Social Policies;

d) Entrustment contents, scope, extents and charges, the rights and obligations of the entrusting parties and the entrusted parties, which are stated in the entrustment contracts, shall be agreed upon by the parties;

e) The general director of Vietnam Bank for Social Policies and the heads of the entrusted units are the legal person representatives in signing the entrustment contracts. If the entrusted parties are legal persons of provincial, district or commune level, the directors of the provincial- or district- level branches or transaction bureaus of Vietnam Bank for Social Policies shall be authorized by the general director to sign the entrustment contracts.

2. In areas where branches of Vietnam Bank for Social Policies are headquartered, loans can be provided directly to borrowers.

3. The Regulation on lending entrustment, the Regulation on operation of and payment of remuneration to, savings and capital-borrowing teams shall comply with the stipulations of the Management Board within the management charge levels of Vietnam Bank for Social Policies, decided by the Prime Minister.

Article 11.- Lending interest rates

1. Preferential lending interest rates shall be decided by the Prime Minister for each period at the proposal of the Management Board of Vietnam Bank for Social Policies, with single unified rate throughout the country, except economic organizations being subjects defined in Clauses 3 and 5 of Article 2 of the Decree on credits for the poor and other social policy beneficiaries, to be decided by the Management Board with interest rates differentiated between Region II and Region III.

2. The overdue debt interest rates shall be calculated as being equal to 130% of the lending interest rates.

Article 12.- Credit risks and handling thereof

1. Vietnam Bank for Social Policies may make deduction to set up credit risk reserve fund into its operation expenditures to make up for single or sectional risks due to objective causes. The deduction level is calculated as being equal to 0.02% of the annual average debit balance. Where the credit risk reserve fund is not used up in a year, it shall be transferred to the subsequent year. Where the credit risk reserve fund is not enough to offset the risks in a year, the Management Board chairman shall report such to the Finance Minister for settlement.

2. Failure to repay their debts by borrowers due to such objective causes as natural disasters, fires, epidemics, changes in State policies, market price fluctuation shall be settled as follows:

a) Where it happens on a vast scale, it shall be settled under the Prime Minister’s decision;

b) Where it happens singly or locally, the debt terms shall be extended or it shall be handled from the risk reserve fund of Vietnam Bank for Social Policies under decisions of the Management Board.

3. Damage caused by borrowers, entrusted organizations and/or officials and employees of Vietnam Bank for Social Policies due to subjective reasons must be compensated for by these subjects who shall be handled according to the provisions of law.

Article 13.- Lending levels

The lending level for a single borrowing suitable to each type of subjects entitled to borrow preferential credit capital shall be decided and announced by the Management Board of Vietnam Bank for Social Policies on the basis of the capital-borrowing demands and sources of capital which can be mobilized in each period.

Article 14.- Lending terms, extension of debt terms, conversion of overdue debts

1. The lending terms shall be stipulated on the basis of purposes of using borrowed capital by borrowers and the time limits for recovery of capital of programs and projects, taking into account the borrowers’ debt- repaying capability.

2. Where borrowers are unable to repay their debts on time as committed for harvests are yet due and prolonged beyond expectation or their products have not yet been sold, the directors of the Bank’s branches where loans have been provided shall consider and permit the extension of debt terms. The extension of debt terms for organizations entrusted to provide loans shall depend on the agreement between the entrusting party and the entrusted party, inscribed in their contracts.

3. For cases of bridging loans: The lending term shall be the duration of the subsequent production cycle.

4. Where borrowers use the borrowed capital for wrong purposes or borrowers deliberately delay the repayment of their debts though they are capable of doing so, their debts shall be turned into overdue debts. The lending organizations shall coordinate with the local administrations and socio-political organizations in applying measures to recover debts.

5. The lending terms, the extension of debt terms, the shift to bridging loans, the conversion into settlement-awaiting debts and the conversion into overdue debts shall comply with the stipulations of the Management Board of Vietnam Bank for Social Policies.

Section 3. PAYMENT AND TREASURY SERVICES

Article 15.-

1. Vietnam Bank for Social Policies may open deposit accounts at the State Bank, the State Treasury and other banks in the country at the nearest places according to administrative land boundaries in order to facilitate the capital disbursement and payment.

2. Vietnam Bank for Social Policies may open deposit accounts for domestic and foreign customers according to the provisions of law.

3. Vietnam Bank for Social Policies may open foreign-currency accounts in foreign countries according to the State Bank’s regulations in service of its operation.

Article 16.-

1. Vietnam Bank for Social Policies has an internal payment system and participates in the inter-bank payment system in the country.

2. Vietnam Bank for Social Policies shall provide payment and treasury banking services:

a) Supplying payment instruments;

b) Providing domestic payment services;

c) Providing services on entrusted cash and non-cash collection or expenditures;

d) Providing other services under the regulations of the State Bank Governor.

3. Vietnam Bank for Social Policies may perform foreign exchange operations and trading.

4. Vietnam Bank for Social Policies may undertake entrusted preferential loans of local administrations, economic organizations, socio-political organizations, associations, non-governmental organizations and individuals inside and outside the country.

The above services shall be provided step by step in conformity with practical conditions, capability and requirements.

Chapter III

ORGANIZATIONAL STRUCTURE, ADMINISTRATION, MANAGEMENT, CONTROL

Section 1. ORGANIZATIONAL STRUCTURE

Article 17.- The organizational system of Vietnam Bank for Social Policies includes:

1. Head-office located in Hanoi capital;

2. Transaction Office, Training Center, provincial-level branches;

3. District-level branches, transaction bureaus of its provincial-level branches.

The tasks, powers and organizational structures of the Head-office, the Transaction Office, the Training Center, branches and transaction bureaus shall comply with the regulations of the Management Board.

Article 18.- The organizational structure of the managing and administering apparatus of the Head-office:

1. The Management Board and its assisting apparatus;

2. The Control Board;

3. The general director and assisting apparatus;

4. The internal inspection and auditing system.

Article 19.- The organization of the administering apparatus of the Transaction Office, the Training Center or branches consists of:

1. The director and deputy-directors;

2. Specialized professional sections;

3. Internal Inspection and Auditing section.

Article 20.- The transaction bureaus of the provincial-level branches of Vietnam Bank for Social Policies shall be located in rural districts, urban districts or cities, where exist no branches of Vietnam Bank for Social Policies. The transaction bureaus have their seals and managed by their directors.

Section 2. MANAGEMENT BOARD, CONTROL BOARD

Article 21.-

1 The Management Board is composed of 12 members, including 9 part-time members and 3 full-time members. 9 part-time members include the State Bank Governor being the chairman of the Management Board, vice-ministers or officials equivalent to vice-ministers of Finance; Planning and Investment; Labor, War Invalids and Social Affairs; Agriculture and Rural Development; the Nationality Committee, the Government’s Office; vice-president of Vietnam Peasants’ Association and vice-president of Vietnam Women’s Union; 3 full-time members shall include 1 member who acts as the standing vice-chairman; 1 as the general director and 1 as the head of the Control Board.

2. Members of the Management Board of Vietnam Bank for Social Policies shall have a term of office of 5 years, and can be re-appointed.

3. The Prime Minister shall appoint and remove from office the chairman, vice-chairman and members of the Management Board, the general director and the head of the Control Board.

4. The standing vice-chairman of the Management Board, the general director and the head of the Control Board shall perform the standing tasks to handle daily affairs between two sessions of the Management Board.

5. In provinces, centrally-run cities, urban districts, rural districts, provincial towns and cities, the representations of the Management Board shall be set up with the presidents or vice-presidents of the People’s Committees of such levels acting as heads. The composition and number of members of a representation shall be the same as prescribed in Clause 1 of this Article, but without the standing deputy-head and full-time members. Depending on the practical situation of each locality, the president of the People’s Committee of the same level shall decide on the composition and personnel and decide on the establishment of representations of the Management Board.

6. The Management Board shall be assisted by a consultants’ board, comprising specialists of various branches, who are Management Board members designated by the Management Board and a number of specialists approved under the Management Board chairman’s decisions. The Management Board’s representations at all levels shall be assisted by directors of branches of Vietnam Bank for Social Policies of the same levels or directors of transaction bureaus.

7. The Management Board and its representations at all levels are entitled to use the apparatus and seal of Vietnam Bank for Social Policies to perform its tasks.

Article 22.- The chairman and other members of the Management Board must not authorize persons who are not members of the Management Board to perform their tasks or exercise their powers.

Article 23.- Tasks and powers of the Management Board

1. To submit to the Prime Minister:

a) The changes prescribed in Clause 1, Article 31 of the Law on Credit Institutions, regarding Vietnam Bank for Social Policies, for decision;

b) The charter; amendments and supplements to the charter on organization and operation of Vietnam Bank for Social Policies, for approval;

c) The credit policy mechanisms applicable to organizations and individuals eligible for preferential loans from Vietnam Bank for Social Policies, for approval;

d) The preferential lending interest rates, for approval;

e) The appointment, removal from office of the Management Board’s chairman, standing vice-chairman and other members, the general director and the head of the Control Board of Vietnam Bank for Social Policies.

2. To consider and submit to competent State management bodies matters to be submitted by the general director:

a) Annual credit plans and financial plans;

b) Handling of risks incurred in the course of operation;

c) Annual property and financial settlement;

d) Wage regimes; financial management regulations; regimes on payment of entrustment service charges, remuneration, commissions.

3. The Management Board shall directly issue decisions:

a) To promulgate documents on operation of the Management Board, the Control Board, the general director;

b) To approve annual reports of the Control Board head;

c) To consider the institution of lawsuits by or lawsuits instituted against Vietnam Bank for Social Policies;

d) To decide on the payroll; the organizational structure of the managing and administering apparatus at the head-office, the organizational structure of administering apparatuses of branches and other organizations within the system of Vietnam Bank for Social Policies; the working regulations; the wage payment regulations; the commendation, reward and discipline regulations, applicable within Vietnam Bank for Social Policies;

e) To promulgate the Regulation on internal inspection and auditing organization and operation under the provisions of law;

f) To adopt the annual employment plans, quarterly, biannual and annual reports on operations; annual general financial statement and settlement reports of Vietnam Bank for Social Policies;

g) To abide by the regime of regular and irregular reporting to State management bodies as provided for;

h) To inspect operations of the Management Board’s representations at all levels.

i) To decide on personnel of the Control Board; the opening, merger, operation termination of the Transaction Office, the Training Center, branches and transaction bureaus.

4. To perform other assigned tasks.

Article 24.- Working regime of the Management Board

1. The Management Board meets once every three months and its meetings shall be convened and presided over by its chairman (or authorized persons). The Management Board’s meeting must be attended by at least ½ of the number of its members. In case of necessity, the Management Board may hold extraordinary meetings at the proposal of its chairman or the Control Board head, the general director or more than 50% of the number of its members.

2. The Management Board’s meetings dealing on contents related to the State management functions of ministries and/or branches, which have no officials to join the Management Board, local administrations, economic organizations, socio-political organizations, associations, societies and/or non-governmental organizations shall be attended by competent representatives of such agencies and/or organizations at the invitation of the Management Board.

For meetings with contents related to the rights and obligations of laborers in the Bank, representatives of the branch’s Trade Union organization shall be invited to attend.

The representatives of agencies and organizations, who are invited to attend the above-said meetings, may give speeches but must not participate in voting.

3. The Management Board works according to the collective regime and vote by majority. All decisions of the Management Board must be voted for by more than half of the number of its members; the members absent from the meetings must give their written votes. Where the number of votes is split equal, the final decision shall rest with the opinion of the Management Board chairman. Those Management Board members who have opinions different from the resolutions or decisions of the Management Board are entitled to reserve their opinions but pending the conclusions of the competent authorities still have to abide by such resolutions or decisions. The reserved opinions shall be recorded in writing with signatures of the reservists and be kept together with the relevant resolutions and/or decisions.

4. The resolutions and decisions of the Management Board shall be binding on the entire system of Vietnam Bank for Social Policies.

Article 25.- The Management Board’s standing office is a mode of working in a circumstance where the majority of the Management Board members work on a part-time basis. The Management Board’s standing office does not constitute an administering and managing level. It performs the following tasks:

1. Meeting monthly to assess the results of activities in the period and projects as well as plans on activities in the subsequent period of the general director;

2. Examining urgent matters proposed by the general director, the Control Board head and/or secretary of the Management Board;

3. Assisting the Management Board and its chairman in compiling documents and directives to implement tasks under the competence of the Management Board and/or its chairman;

4. Preparing contents for the next meeting of the Management Board;

5. The Management Board’s standing office shall hold extraordinary meetings if deeming it necessary and may summon relevant members of the Management Board for settlement of unexpected matters.

Article 26.- Tasks of the Management Board chairman

1. To direct and take responsibility for activities of the Management Board.

2. To sign on behalf of the Management Board together with the general director the reception of capital and other resources assigned by the State.

3. To sign documents falling under the competence of the Management Board for submission to competent State management bodies.

4. To sign resolutions, decisions and documents or adopt documents falling under the jurisdiction of the Management Board.

5. To preside over meetings of the Management Board.

6. To assign tasks to and urge the performance thereof by members of the Management Board.

7. To appoint, remove from office or transfer deputy- general directors, directors of provincial-level branches, the Transaction Office or the Training Center. To decide on the acceptance of members of the consultants’ board, designated by the concerned agencies.

8. To decide on the periodical or extraordinary independent auditing of activities of Vietnam Bank for Social Policies.

Article 27.- Tasks of the standing vice-chairman of the Management Board

1. To settle daily affairs arising between two sessions of the Management Board and its standing office.

2. To administer activities of the consultants’ board.

3. To perform tasks under the authorization of the Management Board chairman.

4. To regularly report to the Management Board chairman on the results of the performance of assigned tasks and take responsibility before the Management Board chairman for his/her decisions.

Article 28.- Assisting the Management Board and its standing office shall be the secretary of the Management Board.

The Management Board’s secretary shall be undertaken by the general director’s office, having the tasks:

1. To prepare contents and necessary working conditions and facilities for the meetings of the Management Board and its standing office.

2. To record the minutes of the meetings of the Management Board and its standing office.

3. To draft resolutions, decisions and notices of the meetings.

4. To manage and archive dossiers and documents of the Management Board.

5. To estimate funding for meetings.

Article 29.- Tasks and powers of the Management Board’s representations of all levels

1. To organize the implementation of resolutions and decisions of the Management Board and superior representations of the Management Board.

2. To adopt plans on capital mobilization and loan provision in the localities for submission to competent authorities for approval. The Management Board’s representations may organize the exploitation and concentration of capital sources to supplement loan capital in the localities.

3. To direct and urge the fulfillment of credit plans in the localities.

4. To direct the inspection and supervision of the entrusted lending parties in the strict implementation of policies and professional regimes as provided for.

5. To coordinate with socio-political organizations in directing the establishment of savings and capital-borrowing teams.

6. To study, sum up and propose to the Management Board for submission to the Government for amendment, supplementation and promulgation credit policies towards the poor and other social policy beneficiaries.

7. To abide by the regime of asking for instructions of and reporting to, superior authorities and State management bodies according to regulations.

Article 30.- The working regime of the consultants’ board

Members of the consultants’ board shall work according to the operation regulation prescribed by the Management Board; have the tasks to directly advise and assist the Management Board members belonging to their respective ministries or branches, and at the same time to advise the Management Board, on undertaking, policies and operation mechanisms of Vietnam Bank for Social Policies, and documents under the Management Board’s jurisdiction.

Article 31.- The Control Board

1. The Control Board is composed of at least 5 members, including 3 full-time members and 2 part-time members of the Finance Ministry and the State Bank, recommended by these two agencies.

2. The Control Board head being a member of the Management Board shall be appointed by the Prime Minister. Other members shall be appointed and removed from office by the Management Board chairman.

3. Tasks and powers of the Control Board:

a) To inspect the financial operation, supervise the observance of accounting regime and activities of the internal inspection and auditing system of Vietnam Bank for Social Policies;

b) To inspect the observance of undertakings, policies, laws and the Management Board’s resolutions;

c) To appraise the annual financial statements for report to the Management Board;

d) To be entitled to use the internal inspection and auditing system to perform its tasks;

e) To adopt control tasks and propose to the Management Board measures to supplement, amend and improve the operation of the Bank under the provisions of law;

f) To perform other assigned tasks.

4. The Control Board head has the following tasks and powers:

a) To organize the performance of tasks prescribed in Clause 3 of this Article;

b) To report on results of periodical control activities at the meetings of the Management Board and to ensure the accuracy, truthfulness and legality of those reports.

Article 32.- Expenses for operation of the Management Board, the Management Board’s representations at all levels, the consultants’ board and the Control Board shall be accounted into the managerial expenditures of Vietnam Bank for Social Policies.

The part-time members of the Management Board, the Management Board’s representations at all levels, the consultants’ board and the Control Board shall enjoy remuneration and other benefits under the regulations of the Finance Ministry.

Section 3. THE GENERAL DIRECTOR AND ASSISTING APPARATUS

Article 33.- Administering the activities of Vietnam Bank for Social Policies is the general director who shall be assisted by a number of deputy-general directors and the professional apparatus.

Article 34.- The general director is the legal person representative of Vietnam Bank for Social Policies, taking responsibility before the Management Board and law for running the activities of Vietnam Bank for Social Policies.

Article 35.- Deputy-general directors are persons who assist the general director in administering one or several domains of operation of Vietnam Bank for Social Policies according to the general director’s assignment and take responsibility before the general director and law for the tasks assigned by the general director.

Article 36.- The general director and deputy-general directors shall be persons other than the subjects defined in Article 40 of the Law on Credit Institutions, reside in Vietnam while in office and have the professional qualifications and capabilities to manage Vietnam Bank for Social Policies.

Article 37.- Tasks and powers of the general director

1. To organize the implementation of resolutions and decisions of the Management Board.

2. To administer professional activities of Vietnam Bank for Social Policies.

3. To join the Management Board chairman in signing the reception of capital and other resources assigned by the State.

4. To promulgate documents on professional guidance.

5. To sign documents, agreements, contracts and certificates of Vietnam Bank for Social Policies in internal and external affairs after getting the approving opinions of the Management Board.

6. To organize job training and popularization of undertakings, policies and professional regulations.

7. To submit to the Management Board:

a) Tasks defined in Clause 2, Article 23 of this Charter;

b) The amendments and supplements to the Charter on organization and operation of Vietnam Bank for Social Policies;

c) The opening, setting up, merger, division and separation, operation termination of branches and other organizations within the system of Vietnam Bank for Social Policies.

8. To promulgate the Regulation on management at the head-office, branches, transaction bureaus and other organizations under Vietnam Bank for Social Policies after obtaining the approving opinion of the Management Board chairman.

9. To appoint, remove from office or transfer holders of positions within the system as follows:

a) Heads and deputy-heads of sections, directors and deputy-directors of professional departments at the head-offices;

b) Deputy-directors of the Transaction Office under the head-office;

c) Deputy-directors of branches and affiliated organizations;

d) Head of the Accounting Section, head of the Internal Inspection and Auditing Section of the Transaction Office, provincial-level branches of the Bank and affiliated organizations.

Other position holders at provincial-level branches of Vietnam Bank for Social Policies and provincial-level agencies attached to Vietnam Bank for Social Policies shall be appointed, removed from office and transferred by directors of the provincial-level branches of the Bank.

10. To periodically and extraordinarily assess and review activities; evaluate influence spheres of operations for submission to the Management Board.

11. To take personal responsibility for management, preservation and development of capital and properties of the Bank.

12. To take responsibility for his/her commitments to customers.

13. To act as the legal person representative of Vietnam Bank for Social Policies before law in legal proceedings, disputes, liquidation, dissolution and in international relations related to operation of Vietnam Bank for Social Policies.

14. To submit to the inspection and supervision by the Management Board, the Control Board and competent State management bodies.

15. To report to the Management Board and competent State management bodies as provided for by law.

16. To perform other assigned tasks.

Article 38.- The chief accountant of Vietnam Bank for Social Policies shall be appointed and removed from office by the State Bank Governor at the proposal of the Management Board upon the consent of the Finance Ministry. The chief accountant has tasks and powers as prescribed by law.

Article 39.- The professional sections (departments) at the head-office function to advise and assist the Management Board and the general director in managing and administering affairs of Vietnam Bank for Social Policies. The organizational structure, functions and tasks of the professional sections (departments) shall be decided by the Management Board.

Section 4. INTERNAL INSPECTION AND AUDITING SYSTEM

Article 40.-

1. The internal inspection and auditing system belongs to the managerial apparatus of the general director, assisting the general director in administering the auditing tasks in the entire system. Members of the internal inspection and auditing system shall not concurrently perform other jobs of Vietnam Bank for Social Policies.

2. The internal inspection and auditing system shall perform its tasks according to the Management Board’s Regulation.

3. The internal inspection and auditing personnel must fully satisfy the general criteria of the Bank’s employees and also the following additional criteria:

a) Being knowledgeable about law and proficient in the professional operations they have performed;

b) Having university or college diplomas in banking, economics, financial accounting;

c) Having worked in the banking or financial domains for at least 3 years.

4. Tasks of the internal inspection and auditing system:

a) To inspect the law observance;

b) To periodically inspect professional activities;

c) To strictly abide by the regime of reporting on inspection and auditing according to regulations, and to report immediately to the general director cases and matters arising unexpectedly;

d) To perform other tasks assigned by the general director.

5. Rights of the internal inspection and auditing system:

a) To request the professional sections and employees directly involved in professional operations to explain work already done, being done and produce directing documents, vouchers, recording books and other relevant documents (when necessary) in activities in service of the inspection and auditing;

b) To propose the general director (director) to set up inspection or re-inspection delegations to perform inspection and auditing tasks when necessary;

c) The head of the internal inspection and auditing section shall be entitled to attend meetings convened by the general director (director);

d) To propose the general director or director to handle according competence units and individuals that have committed acts of violating laws and regulations of the Bank;

e) Other rights prescribed by the general director.

Chapter IV

FINANCE, ACCOUNTING, REPORTING, AUDITING

Section 1. FINANCE

Article 41.- Vietnam Bank for Social Policies follows the financial regimes prescribed by the Government and guided by the Finance Ministry.

Article 42.- The working capital of Vietnam Bank for Social Policies

1. Capital and funds:

a) Charter capital;

b) Reserve funds to supplement the charter capital, the development investment fund, the financial reserve fund, the credit risk reserve fund, the job-loss allowance reserve fund, the reward fund, the welfare fund;

c) The State budget capital (including the central budget, local budgets) to be lent for hunger elimination and poverty alleviation, job creation and implementation of other social policies;

d) Revenue- expenditure difference retained and not yet distributed to funds (if any);

e) Non-refundable aid capital of domestic and foreign organizations and individuals;

f) Other capitals (if any).

When the operation scale of Vietnam Bank for Social Policies is expanded under the direction of the Government, the chairman of the Management Board of the Bank for Social Policies shall report such to the Finance Minister who shall submit to the Prime Minister for deciding to supplement the charter capital.

2. Capital mobilized in various forms:

a) Interest deposits mobilized within the scope of approved annual plans; interest-free voluntary deposits of domestic and foreign organizations and individuals; savings of poor people;

b) The ODA capital assigned by the Government;

c) Issuance of bonds, deposit certificates and other valuable papers under the provisions of law;

d) Capital borrowed from Postal Savings, Vietnam Social Insurance;

e) Capital borrowed from the State Bank;

f) Capital borrowed from financial and credit organizations inside and outside the country.

3. Capital entrusted by domestic and/or foreign organizations and individuals.

4. Other capital.

Article 43.-

1. Vietnam Bank for Social Policies is entitled to use capital to lend to poor people and other social policy beneficiaries.

2. To invest in capital construction and procurement of assets under the provisions of law.

3. To transfer capital and assets among units within the system.

Article 44.- Vietnam Bank for Social Policies may make deduction for setting up the following funds:

1. The reserve fund for supplementation of the charter capital.

2. The credit-risk reserve fund and the exchange rate risk reserve fund.

3. The financial reserve fund.

4. The development investment fund.

5. The job-loss allowance reserve fund.

6. The reward fund.

7. The welfare fund.

Article 45.- Financial autonomy of Vietnam Bank for Social Policies.

1. Vietnam Bank for Social Policies is entitled to financial autonomy and take responsibility for its operation, the performance of its obligations and commitments under the provisions of law.

2. Within 120 days as from the end of the fiscal year, Vietnam Bank for Social Policies shall publicize its financial report according to the current regulations.

Section 2. ACCOUNTING, REPORTING

Article 46.-

1. Vietnam Bank for Social Policies follows the accounting and statistical regimes prescribed by law.

2. Its fiscal year begins on January 1 and ends on December 31 of the calendar year.

3. Vietnam Bank for Social Policies shall conduct accounting according to the book-keeping account system prescribed by law.

Article 47.-

1. Vietnam Bank for Social Policies shall follow the regime of financial reporting and the regime of statistical reporting on professional operations periodically according to the State’s regulations.

2. Vietnam Bank for Social Policies shall immediately report to the Prime Minister, the concerned ministries and/or branches in the following cases:

a) Unusual developments which may seriously affect the situation of operation of Vietnam Bank for Social Policies;

b) Big changes in organization.

3. Within 90 days as from the end of the fiscal year, Vietnam Bank for Social Policies shall send to the Finance Ministry and the State Bank its annual report as provided for by law.

Section 3. AUDITING OF VIETNAM BANK FOR SOCIAL POLICIES

Article 48.- Within no more than 60 days after the end of the fiscal year, the State Audit shall conduct the auditing and certify the annual financial settlement report according to the provisions of law.

Chapter V

DISSOLUTION, LIQUIDATION

Article 49.- Where Vietnam Bank for Social Policies is in danger of losing its capability to pay its customers, it must immediately report to the Prime Minister on the real financial situation, causes and measures already applied, expected to be applied to redress the situation.

Article 50.- In case of urgency, in order to ensure its capability to repay deposits of customers, Vietnam Bank for Social Policies may be provided with special loans by other credit institutions or the State Bank. Such special loans shall be used with priority for payment of all debt amounts of Vietnam Bank for Social Policies first.

Article 51.- Vietnam Bank for Social Policies shall be dissolved in the following cases:

1. The State deems it unnecessary to maintain it.

2. Upon the expiry of its operation term, the Prime Minister does not permit the extension thereof.

3. Where Vietnam Bank for Social Policies is declared dissolved, the liquidation of the Bank shall comply with the provisions of law.

The Prime Minister shall decide on the dissolution and decide to set up the council for dissolution and liquidation of Vietnam Bank for Social Policies.

Chapter VI

INFORMATION AND CONFIDENTIALITY

Article 52.- Vietnam Bank for Social Policies may exchange information on banking activities and customers with other credit institutions.

Article 53.-

1. The officials and employees of Vietnam Bank for Social Policies and the concerned people must not disclose secrets of information on operation of the Bank according to the provisions of law.

2. Vietnam Bank for Social Policies is entitled to refuse requests of organizations and individuals for supply of information related to the deposits and assets of customers and the operation of Vietnam Bank for Social Policies, except where it is so requested by competent State agencies under the provisions of law or so consented by the customers.

Chapter VII

IMPLEMENTATION PROVISIONS

Article 54.- The amendment and supplementation of this Charter shall be decided by the Management Board of Vietnam Bank for Social Policies and submitted to the Prime Minister for approval.

Prime Minister
PHAN VAN KHAI